Health care crisis hits home -- It's our fight now

Deanna Hamilton-Meyers, who teaches fourth- and fifth-graders at Cambridge Elementary in Concord, is one of the many teachers who are finding themselves having to choose between putting food on the table and providing medical care for their families.

When grocery workers went on strike nearly three years ago, some teachers questioned CTA's strong support for working families that included financial contributions, a media campaign and walking the picket line. Others saw the handwriting on the wall.
The central issue of the strike was that employers wanted to raise the amount workers paid for health care coverage. A member of CTA's State Council of Education predicted at that time, "Their fight is going to be our fight."
His prediction was on target. Their fight is now the fight facing CTA chapters throughout the state, whether they are located in urban or rural areas, Title I districts or school districts located in wealthy communities.
The assumption has always been that "they're not benefits if you have to pay for them." But increasing numbers of teachers are, in fact, being asked to pay for medical benefits, accept lesser plans or, in some cases, pass higher costs on to retirees.
"The nation's system of funding health care is on the verge of breaking down," notes the San Francisco Chronicle.  "Employers, consumers and governments are straining under the burden of a health care bill that is growing at a pace five or six times the rate of inflation."
"The crisis is now in the living rooms of the working middle class," says CTA President Barbara E. Kerr. "Many families are having to decide between paying for health care and paying the mortgage or the grocery bill." The issue remains a top concern for CTA.

Deanna Hamilton-Meyers looks as if she hasn't a care in the world as she dances the cha-cha with some of her fourth- and fifth-graders during recess at Cambridge Elementary School in Concord. But looks can be deceiving.

The Mount Diablo Education Association member found herself in the position of having to choose between putting food on the table and providing medical care for her two children. The problem is that medical insurance costs her $966 a month out of pocket.

With a monthly take-home pay of just under $2,200, rent of $1,425 per month and no salary increase on the horizon, Hamilton-Meyers had to take an after-school job. But it still wasn't enough to get out of debt. She and her husband, who lost his job, had to file for bankruptcy.

"If I didn't have to pay out of pocket for health insurance, I'd be okay financially — we'd be making ends meet," says Hamilton-Meyers, who is piloting a new special day class at her school site. "But you have to decide what's more important — having enough money to pay the bills or having health insurance in case the kids get sick. You don't know what's going to happen in life. I feel better knowing we have insurance."

Throughout California — and the rest of the country — increasing numbers of teachers have to pay out of pocket for medical insurance. While most have not been put in the position of having to declare bankruptcy, it still causes financial hardship and forces them to make difficult choices.

When both spouses are teachers, like Scott and Isabelle Bishop in Kerman, the shock of income deductions for insurance is doubled.

Health care is probably the most contentious issue facing members at the bargaining table. Teachers throughout the state report that their districts have imposed — or are attempting to impose — a cap on health care costs, and are asking teachers to pay more. Some districts are asking teachers to accept high-deductible Health Savings Account plans or trying to impose higher fees on retirees, who can least afford to pay them.

Insult is added to injury when teachers are told it's their fault rates are going up. "Brokers will tell them that too many people are using the emergency room or that there's been a spike in member hospitalization," says Susan McClure, a CTA Negotiations and Organizational Development specialist. "They will blame members for being older, fatter, not eating right or not exercising. And, of course, they don't take into consideration that teachers have more goals and regulations to meet, have more kids to test and have to spend so much time working that they don't have time for themselves anymore."

Anger, resentment and feelings of betrayal are the typical reaction when increasing health care premiums are coupled with higher out-of-pocket costs. In the past, teachers were willing to sacrifice salary increases to maintain benefits, even if it put them at a disadvantage for retirement. Now, with soaring out-of-pocket costs and stagnant salaries, teachers feel they have been taken advantage of by districts that don't appreciate the sacrifices they have made.

"Teachers are not being treated as professionals," says Carole Bailey, former president of the Desert Sands Teachers Association. "We have worked hard to raise test scores. We've volunteered countless hours and spent thousands of our own dollars to deliver a quality program for students. In return, we get this."

California teachers have done a good job of negotiating health care coverage. As recently as 2003, 90 percent of K-12 teachers had medical coverage. Approximately 66 percent had a medical plan fully paid for by the district; 33 percent were paying out of pocket for premiums. The average out-of-pocket premium was $1,655 per year ($140 per month) compared with the average California worker ($2,452 for family coverage, up 34 percent from the previous year).

"At bargaining tables all around the state, teachers are being pressured by their districts to put dollar caps on benefits," says CTA finance consultant Lee Lipps. "Districts are using the argument that most other teachers in the state are paying out of pocket, and that simply isn't true; two-thirds of teachers are in some type of fully paid plan." The exception is community college faculty who usually don't receive employer-provided health care. Even though many are parttimers, they may teach at several campuses and put in more than 40 hours a week between them.

Lipps analyzed information school districts voluntarily provide the state via J-90 forms, which include information on health plans for teachers, how much they cost, and how much the district contributes. Out of 985 school districts in California, 880 filled out the form, says Lipps, giving the figures a high level of accuracy. His findings show an upswing in health care insurance caps, plus more tiered and cafeteria-style plans, indicating that more teachers could be paying for benefits in the future.

The Willows Unified School District west of Chico is trying to impose a plan on teachers that could mean out-of-pocket costs for premiums of up to $300 a month. The Willows Unified Teachers Association (WUTA) is asking the district to raise its cap on health care benefits to prevent it from happening.

"The district says it's not asking us to take a cut in pay, but we consider it one," says WUTA President Michael Dennis. "When you have less money to take home to your family, it's a pay cut."

Teachers in the conservative farming community are up in arms about having to pay for health care. "They would strike over this," says Dennis. "It's the one thing they don't want to give up. People have always cherished their benefits. And we've given up so much in the way of salary increases to maintain them."

"Districts want a cap on health insurance premiums because if costs go up, it puts the entire burden on staff and lets the district off the hook," says CTA Negotiations and Organizational Development Specialist Jim Schlotz. "If you have a health care cost cap, district administrators don't care how much health care costs go up, because they only have to pay until costs reach the cap and they're done. Two years ago, you could have had a fully paid plan for $8,000 to $9,000 per year. Now, the same plan costs $12,000 to $13,000. If the cap is still at the $8,000 to $9,000 level, members are paying the difference, which could be $3,000 to $4,000 annually. Unless the employer agrees to raise the cap when costs go up, it's like an automatic pay cut."

Even trusts with a large pool of members are not always able to keep costs down the way they have in the past. In Kerman, a small community west of Fresno, insurance premiums have gone up 43 percent since 2001-02, and out-of-pocket costs have gone up 108 percent. Members belonging to the Central Valley Trust pay between $2,500 and $5,000 a year for premiums, depending upon which health plan they have.

"In our chapter, the people at the top of the pay scale have taken a pay cut year after year," says Scott Bishop, president of the Kerman Unified Teachers Association. "We are currently at impasse in negotiations — what they are offering is not adequate to meet members' needs."

When both spouses are teachers, it's a double whammy. Scott Bishop's wife, Isabelle Bishop, also teaches in Kerman. With both of them paying out-of-pocket costs, they are worried about putting their three children through college. "We can't even buy our college student a car," she says. "When it's double income deductions, you really have to prioritize."

"At the bargaining table statewide, teachers have been continuing to step down their plans and agree to higher deductibles and higher co-insurance levels," says Schlotz. "This means that instead of the district paying 100 percent of the plan, districts are moving to 90-10 plans or 80-20 plans, with an out-of-pocket maximum. In past years the out-of-pocket maximum was around the $600 range. But now districts are demanding that out-of-pocket maximums cost thousands of dollars. School districts see the answer to controlling their costs by making teachers pay more."

In addition, districts are offering cafeteria-style plans and tiered plans. On the plus side, employees are allowed to choose from among an array of health care plans. On the negative side, it can pit member against member and sometimes drive up costs for older members and those with families.

"A district might offer a first-tier plan for employees only," says Lipps. "The second tier is for the employee-plus-one, which is at a higher rate. The third tier, the highest, is usually for families. Rates vary dramatically around the state. The district may fully fund the employee-only plan and the employee-plus-one plan, but those who enroll in the family plan may have to pay out of pocket."

Members of the Chula Vista Educators Association went from paying nothing for premiums to paying out of pocket for employee-plus-one and family plans, says former President Gina Boyd. "I had a meeting with a member who is recently divorced. She can't afford to pay health care benefits for both her children. She was in tears when she asked me, 'Which one do I choose?'"

Jim Williams

A tiered plan has had the unfortunate effect of pitting member against member in Rocklin, says Rocklin Teachers Association President Mary Dick. Previously, everyone paid the same for coverage whether they had a family or not. "We took a vote because costs were getting so enormous," she recalls. "We had singles paying hundreds of dollars a month who never went to the doctor. Because our population of teachers was relatively young, they couldn't afford it. We voted to go to a tiered plan and then it hurt families, especially when teachers were the sole insurer for the family."

Today, she says, the decision may be coming back to haunt teachers who are starting families of their own. "When you're young and single, you don't think about having to insure a family," says Dick. "When you get married and have children and have to pay, it can be very expensive."

"Districts commonly tempt employees with rebates for accepting the cheapest plan," says Jim (Willy) Williams, a member of the Chico Unified Teachers Association (CUTA). "Those rebates quickly turn into payroll deductions as rates soar. Worse still, associations that accept tiered rates lose their ability to effectively bargain health care, because solidarity is replaced by self-interest. Through these divisive measures, districts effectively pit members against one another — the old against the young, the sick against the healthy, and families against single members."

Williams was among those who spoke out at CTA's June State Council meeting when delegates voted to take the position that all educational employees have a right to employer-paid comprehensive health and welfare benefits that are uniform and based on a composite rate for all unit members. Delegates warned against plans that include tiered rates, opt-outs, cafeteria-style plans or cash-in-lieu provisions. Even though many existing contracts include such provisions, Council members argued that they should not be encouraged because they pit members again at members.

Lack of access to health care cuts some students out of sports, says Richard Gabriel in El Monte.

Rising health care costs are frequently worse in rural areas because there's little in the way of competition among the few providers, adds Williams. Chico formed a self-funded trust a few years ago, but found that there was not a big enough membership pool in the rural region to lower health care costs. Now CUTA is part of a Joint Powers Authority plan governed by management in which school districts band together for insurance coverage. CUTA recently approved a new contract and switched health plans from a "gold" plan to a "silver" plan that provides slightly less in benefits. Williams and CUTA President George Young are exploring the possibility of forming a new trust with chapters north of Sutter County that would have 2,000 to 3,000 members.

In districts that have rolled salary and benefits together, the result has often been devastating. In the Mount Diablo Unified School District, a "stipend" was rolled into teacher salary to pay for benefits, says Mount Diablo Education Association President Michael Noce.

"Years ago, the association voted in favor of rolling $4,000 a year into salary, and that covered the expenses of health care for single coverage and dual coverage, while families paid about $2,000 out of pocket a year." Unfortunately, raises were tied to a COLA formula rather than an increase in premiums. Salaries stagnated and medical costs rose 68 percent over the last five years, translating into huge out-of-pocket costs. Noce, for example, pays $6,500 per year for Kaiser coverage.

When the vote was taken years ago, says Noce, many older members voted for rolling benefits into salary so they would get a "bump" in retirement benefits, without regard to younger members starting their careers. "It was very divisive, and people are still angry about it," he said. "We will definitely have to renegotiate it."

Deanna Hamilton-Meyers in Mount Diablo hopes things improve before she is forced to change jobs. "I love the school, the staff and the kids here," she says. "In some ways I can't imagine leaving. But there comes a point when I have to think about what is best for my family. I have to think about the need to feed my kids and provide them with health care without breaking the bank to pay for it every month. It's hard to keep my morale up."

MDEA has been without a contract for the past year and has not had a raise in three years. Association members are leafleting prospective teachers at the district's job fairs to let them know they will be paying huge out-of-pocket costs for medical benefits if they are hired. "It's important that recruits have their eyes wide open and understand the system thoroughly," says Noce.

NEA-Jurupa also put too much money into salary and not enough into benefits. Members got "blindsided" this year, says newly elected president John Hill. The district imposed a "surcharge" on a four-tier scale with families having to pay in excess of $2,000 a year toward their benefits. The surcharge negated a small salary increase for members.

"When you consider our total compensation out of 10 surrounding districts, our salary has stagnated and our health and welfare benefits are among the worst," says Hill. "People are disappointed and disgusted, and morale is low. Our district needs to reprioritize what's important to them. And one of those things should be taking care of its employees."

Some insurers have raised the rates for retirees to offset rising health care costs. Beginning this school year, the Central Valley Schools Health and Welfare Trust with 180 participating school districts and 38,000 covered employees will be raising its insurance premiums for retirees by 24 percent compared to 12 percent for working members. The reasons cited by the trust in a letter to participants included higher use of prescription drugs by retirees and growing numbers of retired members compared to shrinking numbers of active employees.

"Because of changes like these, CVT realized that it must look at the cost to insure active employees separately from the cost to insure retirees, and establish different prices for each group," reads a letter to plan members.

"We bargain for our retirees as well as for our active members, and they can ill afford that kind of increase," says WUTA President Dennis.

Many districts that offered retirees medical coverage in the past are opting not to continue the practice. Teachers who retire before age 65 could be left without health insurance until the time they are eligible for Medicare.

The Oxnard Education Association is at an impasse with the district partly because of its desire to take away retiree health benefits, says bargaining chair Robin Lefkovits. The district says that any increase in medical benefits for employees is contingent upon accepting a "restructuring" of retiree benefits.

Lefkovits says members don't like being "held hostage" to such a restructuring plan and find any effort to take away retiree benefits unacceptable. "It's an awful, no-win situation," she says. "No matter what happens, somebody loses."

Some facts about health care

Millions of Americans are spending their life savings on health care even though they have insurance, according to a study by Families USA.

Those who do seek medical care may be ruined financially.

Every 30 seconds, an American files for bankruptcy after having a health problem. Among those whose illness led to bankruptcy, 75 percent had insurance at the time of the illness. The majority of the medically bankrupt had been to college, had responsible jobs and had been homeowners.

Bankrupt families lose more than their assets.

One in five reports going without food. A third had utilities shut off. Nearly two-thirds skipped needed doctor or dental visits.

And it's likely to get worse.

From 2000 to 2004, premiums paid by workers rose nearly three times faster than the average U.S. earnings.